Liberty

Yeah, and people like Klarman and Howard Marks invest differently than most here. They buy lots of distressed debt when things blow up. I think it's probably easier to find undervalued good businesses on any random day of any random year than it is to find truly irrationally priced debt (but that's just my sense -- I'm no debt expert). As for Dalio, well, he seems in a class of his own for that macro stuff.

But cash is not an end in itself, right? If gold is a kind of cash, it's a kind of cash that you plan to use. So their thinking must be something like: "If we come to a situation where gold does really really well, we sell it and buy productive assets with the proceeds". Otherwise, the high volatility and unpredictability of gold as cash doesn't make it work as a regular source of liquidity for normal investing needs, so it almost has to be held for these special situations. That makes some sense on its own, but in practice, situations where gold would do really really well seem pretty rare. As I said, stocks have done better over time in very high inflation periods, so you would need something pretty dramatic for gold to have been better adjusted for the whole opportunity cost of holding it. That doesn't seem to happen ever quarter of a century, maybe every half-century, I don't know. What if instead of holding gold mostly tracking inflation for 50 years you held a good business growing IV at 10-15%?

I don't know the position sizing of Klarman and Dalio in this. I know that Paulson definitely saw it as an investment. But even as cash.. Ok, maybe my cash (of which I never have much, as I tend to be closer to fully invested) will lose a bit of value over time, but gold is so volatile that I absolutely can't predict that it won't lose more value than cash over any period of a few years, and on top of that, I don't really see a good way to value gold to know if it's overvalued or not, so it's very hard to know when it has a good chance of doing well. Maybe if I was going to hold gold for decades I could be fairly certain that it would go up in price vs the dollar with inflation, but why would I hold a non-productive asset for decades when I could own a business? The same people who were right about the bull market in gold over the past decade were wrong about the recent slump, so I doubt anyone has a reliable formula.

I haven't run into that too much, but it's annoying when it happens. I guess it always takes a while for all web designers to figure out new formats (there's an adoption period). The good ones have already done so, but the less good ones will need a bit more time -- either for better mobile sites that optimize things differently for tablets and phones, or by serving mobile only to phones and not to bigger tablets.

The last nail in the coffin of gold and commodities as insurance against catastrophe XYZ for me was when I saw a study that showed that common stocks did better during periods of very high inflation. I don't remember exactly the article, but I remember that I posted it on the board.. Anyway, so what's the point then? Better to own a wonderful business with pricing power if things are going to go real bad. What's left then is trying to time where you are in the gold/commodity cycle to catch it at the bottom and sell it at the top, but that's not a game I want to play. I'll leave that to Rick Rule...

http://www.businessweek.com/printer/articles/690785?type=bloomberg

Definitely cool to have the option! On my iPad, I prefer the regular site, though -- for those who do too, there's a button at the bottom of the page that allows you to see it on a mobile device.

Found this on Netflix and it's pretty decent. Basically Hank Paulson sitting in a chair and being interviewed, mostly about his time as Treasury Secretary during the crisis, for an hour and a half. Not the best thing ever, but I know some people here would enjoy hearing straight from a primary source like this.

For those interested in this topic: http://www.res.org.uk/view/art1Oct13Features.html

A lot of what Malone has been doing historically is creating structures that create a discount (among other things), then he buys back tons of shares, and then he simplifies things to remove that discount. He's creating value in the meantime, so even if the split was pushed off until 2015, I wouldn't mind. QVC's standalone financials will look better with a smaller share count. I think that's part of the plan I mentioned above. They even hide a lot about QVC in the LINTA filings.. They'll keep being opaque about CommerceHub until they feel it's ready for the spotlight (I've noticed that in presentations they talk a lot more about some of their other ecommerce business.. they must feel there's a competitive advantage in keeping CommerceHub semi-hidden). I know it can be frustrating, but this is definitely a jockey stock that requires a certain level of trust in management's judgement.

Not that it matters that much, but here's Brooklyn Investor on the 500 pages per day or week: Part of a longer post about the interview: http://brooklyninvestor.blogspot.ca/2014/03/buffett-on-cnbc-with-3ts.html

Can you elaborate on why you think that about HSN's management? The fact that they have much lower margins than QVC and no international expansion initiatives doesn't make me feel like management is doing the best job they could. They seem under-levered too, and the money they're spending on dividends would probably be better spent on buybacks. That's very likely, but I see it as having a different risk profile too. Unlike everybody else in retail, they are price-competitive with Amazon while having 3x Amazon's EBITDA margins and lots of FCF, they are very very stable (the 2008-2009 crisis barely hurt their revenues compared to most others), and so, as Maffei said in the last CC, they can support a good amount of leverage safely. Levering up a very stable business can lead to the kind of returns that Malone likes over the long term (especially when combined with large buybacks under IV and all his other tricks to minimize tax). It could get even better if they merge with HSN once QVC isn't so undervalued, and then bring HSN's margins and leverage to QVC's level. I also think the Chinese JV could be worth a ton over time, but we'll see, it's more of an option at this point. So it's not a rocket ship, but I think it's undervalued, I trust management will keep creating more value, and it's the kind of business you can sleep well at night owning, IMO.

There are indeed some key players, like Ive, that could make a huge difference if they were ever hit by a bus (read the recent biography of Ive by Leander Kahney to better understand his role -- I thought it was a rare good book about Apple, one of the few ones that actually tells you something useful). But I doubt they have any interest in retiring any time soon. Someone like Ive will be doing this stuff on his deathbed, he probably dreams about it, and he's not going to leave Apple for another company (where's he going to go? Even he said that what he's doing with his team couldn't work outside of Apple because nobody else has the design and product-driven culture).

http://brooklyninvestor.blogspot.ca/2014/03/berkshire-hathaway-annual-report-2013.html

I was actually happy with that. Apart from the timing, it doesn't seem anything else has changed, so if the spin-off turns out to be a catalyst to re-price QVC in the market (based on its stronger fundamentals and better capital allocation, it should trade at higher multiples than HSN), the longer the company has to do buybacks at a cheap price, the better for the long-term. In other words, I like knowing that they have that lever available to unlock value, but I'm in no hurry for them to pull it as in the meantime they're creating value in other ways that might then stop being available.

Yeah, a recent Economist issue also had something about this. Seems to make complete sense over the mid-term; the best way to reduce Russia's influence is to create a more liquid and more responsive global market for oil and especially natural gas. (the responsive part is about how it takes so much more drilling with shale, so you can more easily modulate the number of wells you're drilling to respond to supply shocks).

Thanks jm25! :) I will dig into it when I have a chance, but I think it's worth creating a thread about it. It'll make it easier for find any information that is added to it over time than if it's scattered everywhere.

http://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2014/03/03/2014-03-03%20Ask%20WarrenBuffett%20complete%20transcript.pdf

Found this transcript: http://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2014/03/03/2014-03-03%20Ask%20WarrenBuffett%20complete%20transcript.pdf Still looking for the full videos.

I usually look on the Buffett Watch page to see when they appear: http://www.cnbc.com/id/19206666 Looks like part of it is up. Not sure if there's a better way to find the videos or if they're already up somewhere else, though.

Thanks for the suggestion, I'll have a look. Can you share the elevator pitch on what you like about it? How's management? I see that like Paladin they don't like debt.

That guy is not exactly subtle, but his record speaks for itself.

The part about the size of the shareholder was mine, not Cook's. As for the rest, some things are so obvious.. I don't think Cook should have to explain how being a good place that cares for its employees and having an admired brand for doing good things is an advantage for the company anymore than he should have to explain why his bathrooms aren't segregated by skin color or whatever. Sure, he could have handled it more smoothly, but we're all humans and some people get under our skin. It's not like Munger never criticizes.. Here's more detail on what happened: So he explained his view, he didn't just reject the question. There are certain things the company does first because they are right, and then because they can help profitability (ie. making devices accessible for the blind -- might not pass a straight ROI test compared to using same engineers on another project, but still the right thing to do). Telling him to sell the stock might not have been diplomatic, but it was straight-talking; if we're not going to change to be the way you want us to be, your best option is probably not to own the stock. If I buy Philip Morris shares and go ask them to stop making cigarettes because I think they're a bad thing, I expect the reply I get to basically mean "if you don't like the way we do things in an area where we're obviously not going to change, you probably shouldn't own the stock".

Wasn't it a microscopic shareholder who wanted to pass a resolution that would prevent Apple from doing anything that isn't directly profit-oriented (ie. don't work on discrimination, worker conditions, the environment, etc)? No wonder it made Cook angry, as I'm sure it would make Buffett or Munger the same. How many other companies would tie their hands that way? Now of course everybody tried to spin it into a big thing that it wasn't...

Thanks.